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1
MARKETING MANAGEMENT
prashant kumar galgotia business school
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Unit 2 (Contd.) – Strategic Planning &
Marketing
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Strategic Planning
• Strategic Planning involves a thorough appraisal of the external environment and an internal appraisal of the corporation and its businesses.
• It involves bringing the corporation’s ambitions to the fore, identifying its competitive advantages, deciding the businesses in which it should stay, the businesses it should quit and the ones it should enter anew.
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Why is Strategic Planning needed?
Environment keeps changing and it makes strategic planning necessary for the business firm.
The inventor of the Walkman did not anticipate a computer company like Apple to come up with iPods and iTunes.
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HUL to erase 'Ice Cream' word from Kwality Walls advertisements (Slide 1)
• India's advertising regulator has told consumer goods major Hindustan Unilever to stop mentioning its Kwality Walls brand as 'ice cream' in certain advertisements.
• Kwality Walls is frozen dessert, which looks and tastes like ice cream but is made with vegetable fat and not milk fat.
• Under Indian laws, it does not qualify as ice cream. • The consumer complaints council, the sub division of
Advertising Standards Council of India, the self-regulatory body of advertising industry has concluded that the mention of Kwality Walls as an ice cream is misleading.
• The advertisements in question are in the form of advertorials.
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HUL to erase 'Ice Cream' word from Kwality Walls advertisements (Slide 2)
• HUL published three print advertorials, each featuring a celebrity talking about Kwality Walls brand.
• HUL has now agreed to replace the word 'ice cream' with 'frozen dessert' in the ads.
• The ice cream-plus-frozen desserts market in India is estimated at about 1,700 crore, with market leader Amul holding about 40% share.
• Other big players include Kwality Walls, Ahmedabad-based Vadilal, NDDB's Mother Dairy and Ravi Jaipuria group's Cream Bell.
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HUL to erase 'Ice Cream' word from Kwality Walls advertisements (Slide 4)
QuestionsQ1. What are the options available with HUL
now?Q2. What are the challenges the company might
face to sustain the consumers’ trust in the company?
Q3. Should HUL think of making ice cream with milk fat? What would be the strategy of HUL in marketing such a product?
Q4. Why do you feel HUL is misleading consumers by masquerading frozen dessert as ice cream?
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How does Strategic Planning help the firm?
• Provides direction to the firm and serves as a road map
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How does Strategic Planning help the firm?
• Prepares the firm to face the future
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How does Strategic Planning help the firm?
• Enables the firm take all long-term decisions• Lays down growth objectives of the firm and
provides strategies• Serves as a hedge against uncertainty arising
from environmental turbulence• Helps the firm understand trends • Provides the best possible fit between the firm
and the environment• Helps acquire competitive advantages• Ensures optimum utilization of the resources
among the product market opportunities
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“Strategic decisions” vs “Administrative & Operational
decisions”• Strategic decisions pertain to connecting with the
external environment; administrative and operational decisions are concerned with day-to-day operational and administrative matters.
• Strategic decisions have a long-range focus; administrative and operational decisions accept the firm’s businesses, products, etc, as they are.
• Strategic decisions are the responsibility of the top management; administrative and operational decisions are taken by the middle and lower level management.
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Tasks involved in Strategic Planning
• Clarifying the mission of the corporation
• Defining the business • Surveying the environment• Internal appraisal of the firm• Setting the corporate objectives• Formulating the corporate strategy
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Clarifying the mission of the corporation
What is a Mission?
The mission is an expression of the corporate intent. It gives a clear overview of the company’s values and ideals. It conveys the company’s business purpose and reason for existence. It subtly indicates the businesses the firm will pursue and the customer needs it will seek to satisfy.
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What does mission do?• Mission directs entire planning and guides
objectives
• Profitability, not a major subject in mission
• Mission expands and changes as the firm grows
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Examples of Mission Statements
means quality: this is our promise. Our reputation
is built upon quality: our commitment to
continuous improvement will ensure that our
promise is delivered.
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Examples of Mission Statements
“To organise the world's information and make it
universally accessible and useful.”
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Examples of Mission Statements
“We meet everyday needs for nutrition, hygiene
and personal care with brands that help people feel
good, look good and get more out of life.”
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Examples of Mission Statements
“To become a world class automotive engineering
and product development centre, and enable
Tata Motors
to become a world class automotive company.”
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Defining the business (Slide 1)• What business are we in?
• What customer needs do we intend to serve?
• In what other ways can we meet this need?
• What could be the nature of this business in the future?
• What are our basic strengths and distinctive capabilities to operate in this business?
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Defining the business (Slide 2)• Defining business today is difficult. • Still a business definition is needed, a pithy,
clear-cut statement of the business.
• There is great need to look beyond the product, the natural boundaries and ranks of one’s competitors of today.
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Examples of Business Definitions
Nokia “We are a technology company providing products and solutions in the area of mobile communications that gives people unique experiences. That happens through the lifestyle, through the design, through the consumer experience, elements that we have embedded in the products. It would be wrong to say, for instance, that we are a consumer electronics company. That does not tell the full story.”
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Examples of Business Definitions
Kingfisher Airlines
“We are in the aviation hospitality
business.”
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Surveying the environmentTechniques used in Environment Analysis• Econometric models• Trend analysis• Regression analysis• The Delphi Technique• Benchmarking• Espionage/spying• Executive opinion/expert opinion• Sales force estimates• User expectations• Market survey• MIS of the firm
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Internal appraisal of the firmThe firm determines if there is a good fit between
the spotted opportunities and its own capabilities.
• Assessment of the strengths and weaknesses in different functions
• Appraisal of the health of the individual businesses
• Assessment of the competitive advantage and core competencies
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Setting the corporate objectives
• Opportunities in the environment indicates “what the firm might do.”
• The firm decides “what it could do,” after it assesses its internal strengths.
• “What the firm would do,” eventually depends on its basic posture and values.
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Setting the corporate objectivesAreas where corporate objectives are set:• Growth • Profitability • Market share & competitive position• Productivity • Technology & R&D • Flexibility of business portfolio • Human resources• Corporate image• Social responsibility
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What do we want to achieve?
“Objectives”
How will we go about achieving our desired
results?
“Strategy” • Strategy is about direction• Strategy is about choices• Strategy is about differentiation
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What is Strategy?
• A strategy is a comprehensive action plan that identifies long-term direction and guides resource utilisation to accomplish organisational goals with sustainable competitive advantage.
• Strategy is the way a firm reacts to its business environment, deploying its resources and marshalling its efforts for achieving its goals.
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Formulating the Corporate Strategy
Corporate strategy is about the overall organisation’s purpose, the mission of the company and the vision of what such will look like.
Corporate strategy has to specify, through which businesses and through what kind of product-market exposure, is the growth objective going to be achieved.
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Formulating the Corporate Strategy
Business strategy defines where and how to
compete in each chosen market and specifies the
business model and resources needed.
Marketing strategy defines how brands, products,
channels and communications must be developed
and deployed to achieve success.
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Formulating the Corporate Strategy
Build?Maintain?Harvest?Divest?To what extent?At what pace?
The firm decides the businesses to be cultivated, held, phased out and the new businesses to be taken up for meeting the growth needs.
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Beauty business set to boom (Slide 1)
• Beauty consciousness has dawned on rising affluence. • More households are upgrading to a higher consumption
lifestyle; there is an explosive growth in the Indian beauty space.
• Living Standard Measurement (LSM) is being considered the new socio-economic classification to gauge consumption patterns: LSM 1-4 is the lowest level and LSM 8-plus is the top end.
• There has been an 80-fold jump in growth in the consumption of beauty products and services.
• Hindustan Unilever (HUL) is now speeding up to open a Lakme salon a week.
• Jawed Habib Hair & Beauty (JHHB), which has grown from 37 salons in 2006 to around 225 at the end of November 2010, is also eyeing a similar growth.
• And the foreign chains like the contemporary French beauty salon, Jean-Claude Biguine, with annual revenues of 150 million euros, are setting up salons to groom the Indian consumers.
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Beauty business set to boom (Slide 2)
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Beauty business set to boom (Slide 3)
• The mushrooming of branded chains is expected to change the landscape completely, ushering in a new era of trained salon personnel, global insights and latest technologies.
• Lakme has dramatically stepped up investment, innovation and its market capabilities.
• With close to 150 salons at present, HUL is scaling up rapidly, setting up one Lakme salon per week. The ambition is audacious.
• Currently, Indian hair and beauty industry is seeing a per capita annual spend of only $1.2, which is far lower than world standards. This number is expected to grow to $5 by 2015.
• The beauty market roughly estimated at Rs 7,000 crore consisting of organized and unorganized hair and beauty industry, is growing at the CAGR of 35%. At this rate, it has the potential to become a Rs 30,000 crore business by 2015.
• Lakme has realized that the traditional methods of running an FMCG company would not apply here.
• The company has set up a 100% subsidiary, looked after by a dedicated team having a separate CEO.
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Beauty business set to boom (Slide 4)
• In addition, HUL has now launched a beauty academy with the objective to provide in house training to stylists.
• For this, HUL has forged an alliance with Pivot Point, a leading beauty training company in the US.
• The company has created a Lakme brand council which will advise on product innovation.
• HUL has already launched Unilever's global professional product brand TIGI and hopes to build the salon brand in a major way.
• It has tied up with global partners, Toly in Malta for packaging structures, Fiabila in France for Nail Enamel, Schwann Stabilo in Germany for all pencils and applicators and Intercos in Italy for lipsticks, eye shadow and face make up.
• Perhaps the government needs to set up a regulatory system.
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Beauty business set to boom (Slide 5)
• Questions• With national players expanding their base, will the unorganized
market eventually be devoured? • Why not?
• What should now be the strategy of predominantly unorganized locally run beauty salon market which is at an inflection point?
• What are the environmental factors that will fuel the growth of beauty industry?
• Why do you think that there is really room for so many players in the Indian beauty space?
• What is crucial for any business model is the right return on capital, the right cost structure and the right people. What are the factors that can decelerate the growth?
• Why is the regulatory system needed in the beauty industry?
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Strategic Business Unit (SBU)An SBU is a group of related businesses that can be treated as a unified entity for the purpose of strategic planning.
The principle underlying the SBU grouping is that all related products, related from the standpoint of function, should fall under one SBU.
In basic factors, mission, objectives, competition and strategy, one SBU will be distinct from another.
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Kirloskar Oil EnginesKirloskar Oil Engines makes different varieties of
engines – large engines, medium-sized engines
and small engines.
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Titan IndustriesTitan Industries has four SBUs – Watches, Jewellery business, Eye wear and Precision engineering.
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Titan IndustriesTanishq offers a premium range of innovatively created gold jewellery. Under Eye wear, Titan Industries offers sunglasses under its Fastrack brand.
The Precision Engineering division of Titan Industries supplies precision components to the aviation and the automotive industry.
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The BCG ModelBCG matrix is often used to prioritise which products within the company product mix get more funding and attention. The BCG matrix is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970’s. The basic idea behind it is that bigger the market share a product has or faster the product's market grows the better it is for the company.
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The BCG Model Stars (high growth, high market share)A Star needs a good deal of investment support as it operates in a high-growth market. It normally does not bring in immediate profits but holds great potential for the future.
Cash Cows (low growth, high market share)A Cash Cow brings in a lot of cash to the company. It does not need heavy investment; being in a low-growth market, expansion possibility and hence investment needs of a Cash Cow, are minimal.
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The BCG Model Dogs (low growth, low market share)Dogs being businesses with weak market shares in low-growth markets, are generally a drag on a company and its resources. They are actually cash-traps.
Question Marks (high growth, low market share)Question Marks are net users of resources. But unlike the Stars, their future is uncertain. In addition, they are in the high-risk category while Stars are in the medium-risk category.
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The BCG Model Limitations of the BCG Matrix • How we define market and how we get data
about market share.• High market share does not lead to
profitability at all times.• Market growth is not the only indicator for
attractiveness of a market.• Low share or niche market can be profitable
too.• The model employs only two dimensions.• The model neglects the effect of synergy
between business units.
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Balanced Product Portfolio A high-growth product takes some effort
and resources.
A low growth product is an established
product known by the market.
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Options for assessing growth opportunities
• Intensive growth opportunities
• Integrative growth opportunities
• Diversification growth opportunities
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Intensive growth opportunities
Ansoff’s Product-Market Expansion Grid
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Intensive growth opportunities • The world’s second-largest personal computer-maker,
Lenovo is sprinting fast in India. • In the government and education sector, the company is
number one. There is an ambition to reach 30% market share and to build a lead of about 6-7% over the number 2 player.
• In consumer market, Lenovo has a market share of about 10-11%. There, it wants to move to about 15% share.
• In small and medium business, it has 5 -5.5% market share and that is where it wants to reach double digits.
• In India’s PC market, Lenovo is number two.
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Intensive growth opportunities • The rural India growth story is spreading with governments’
stimulating measures and increasing reach of marketers.
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Intensive growth opportunities Google developed a new browser Chrome for the
existing internet users.
McDonald’s is always coming out with new
burgers.
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Intensive growth opportunities Recognising that software as a service can be a
potent market penetration tool, Dell is assembling a
services portfolio that now includes e-mail disaster
recovery, spam/virus filtering and archiving via its
MessageOne acquisition.
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Intensive growth opportunities GlaxoSmithKline was the first one to launch
Sensodyne toothpaste in the tooth sensitivity, in the
pain relief category to take on the oral care giant
Colgate who launched Sensitive Pro-Relief toothpaste
subsequently.
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Intensive growth opportunities Canon diversified from a camera-making company
into producing whole new range of office
equipment.
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Bata India Bata India, a Swiss multinational, was reeling under
continuous losses that peaked in 2004 to Rs 62 crore on a
turnover of Rs 725 crore and steadily grew thereafter till 2010,
when the company registered net profit of Rs 95 crore on a
turnover of Rs 1277 crore.
What did Bata do? • Bata stores would remain closed on Sundays and most
would down shutters by 6 pm. The company ensured that the stores remain open every day for 12 hours.
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Bata India • In footwear, higher display tends to drive
higher sales. So the company plans to increase the average store size to 5000sq ft.
• Bata is considering a proposal to start franchisee operations in smaller cities where setting up company-owned outlets may not be viable.
• The company has launched a website for online sales which is growing @ 200% and already has about four lakh visitors since its launch about a year back.
• Bata customizes the designs for India. For instance, Indian women prefer small-sized heals and there is a growing demand for closed shoes.
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Coca-Cola • Sales of soft drinks have long been stymied by erratic
power supply in markets deep in the hinterland. • Coca-Cola has developed a chest cooler, “eKOCool,” that
operates exclusively through solar energy. It has a capacity to store two crates which contains 48 bottles of 300ml each.
• The innovation gives Coca-Cola a competitive edge to tap new rural markets and ramp up sales of a product which is always best served chilled.
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Integrative Growth Opportunities
• The company can increase sales and profits through backward, forward or horizontal integration.
• When the company acquires one or more of its suppliers, it is called backward integration. The goal of backward integration is for the company to increase its purchasing power while diminishing that of its suppliers.
• Forward integration means that the company enters into distribution, wholesale or retail business. Doing so ensures the company has a tighter rein over the supply chain where the sale takes place.
• Horizontal integration happens when the company acquires one or more of its competitors.
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Diversification Growth Opportunities • Concentric diversification – The company seeks
new products that have technological or marketing synergies with existing product lines appealing a new group of customers.
• Horizontal diversification – The company develops new products that are technologically unrelated to its current products and appeals to its current customers.
• Conglomerate diversification – The company seeks new opportunities that have no relation with its current technology, products or markets.
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Vertical Integration • In the competitive world, companies do whatever
it takes to secure their stature in the marketplace.
• One of the most effective means is vertical
integration, which takes on two forms: forward
integration and backward integration.
• Businesses that practice vertical integration
control every facet of production, from obtaining
the necessary materials to selling the finished
product.
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Vision & MissionVision is the art of seeing into future.What exactly are a mission and a vision?• A mission is what an organization does, its action; a
vision is what an organization would like to happen as a result of the action that it does.
• Mission describes what the organization is now; vision describes what the organization would like to become.
Do we need both a mission and a vision?• Vision without action is merely a dream. Action without
vision just passes the time. • A vision statement describes how the future will look if
the organization achieves its mission. • A mission gives the overall purpose while a vision
describes a picture of the "preferred future."
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The Marketing Mix & 4 PsWhat is marketing? • Putting the right product in the right place, at the
right price, at the right time.
Understanding the Tool• "Marketing mix" is a general phrase used to
describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market.
• The 4 Ps is one way, probably the best-known way, of defining the marketing mix.
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The Marketing Mix & 4 Ps
The 4Ps are:
• Product (or Service)• Place• Price• Promotion
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The Marketing Mix & 4 PsProduct/Service• What does the customer want from the
product/service? • What features does it have to meet these needs?• Are you including costly features that the customer
will not actually use?• How and where will the customer use it?• What does it look like? How will customers
experience it?• What size(s), colour(s) and so on, should it be?• What is it to be called? • How is it branded?• How is it differentiated from your competitors?• What is the most it can cost to provide and still be
sold sufficiently profitably?
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The Marketing Mix & 4 PsPlace• Where do buyers look for your product or service? • If they look in a store, what kind of store is it? • How can you access the right distribution
channels? • Do you need to use a sales force? • What do you competitors do?
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The Marketing Mix & 4 PsPrice• What is the value of the product or service to the
buyer?• Are there established price points for products or
services in this area?• Is the customer price sensitive? • What discounts should be offered to trade
customers or to other specific segments?• How will your price compare with your competitors?
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The Marketing Mix & 4 PsPromotion• Where and when can you get across your marketing
messages to your target market? • Will you reach your audience by advertising in the
press or on TV or radio or on billboards? • When is the best time to promote? • How do your competitors do their promotions?
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The Marketing Mix & 4 Ps• Another marketing mix model is 7Ps, sometimes
called the extended marketing mix, which include the first 4 Ps, plus people, processes and physical layout decisions.
• Another marketing mix approach is 4Cs. It is made up of Customer needs and wants (the equivalent of product), Cost (price), Convenience (place) and Communication (promotion).
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Marketing Information System (MIS)
• Marketing Information System (MIS) is a system that analyses and assesses marketing information, gathered continuously from sources inside and outside an organisation.
• Market Information System is a set of procedures and practices employed in gathering, analyzing, and assessing information about a firm’s market environment comprised of competitors, customers, suppliers, distribution intermediaries, and sales personnel.
• Timely market information provides basis for monitoring and estimating emerging market trends. This is also called market intelligence system.
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Marketing Information System (MIS)
Developing an MISA system is created in three phases:• understanding of the information needs • locating relevant data and transforming this into
usable information • making this information available to managers
Locating data and developing information• The information needed by marketing managers
comes from internal company records, marketing intelligence and marketing research.
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Shoppers Stop• Shoppers Stop offers shoppers a membership card, called
First Citizen at Rs 200. • The card entitles shoppers to discounts on items, but also
provides valuable information to the chain. • Since Shoppers Stop encourages customers to use their
card with each purchase, it can track what customers buy, where and when.
• Using this information, it can track the effectiveness of promotions, traces customers who have defected to other stores and keep in touch with them if they relocate.
• Information from internal records is usually quicker and cheaper to get than information from other sources.
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Marketing Intelligence• Marketing Intelligence gives everyday
information about developments in changing marketing environment that helps managers prepare marketing plans.
• Some companies set up an office to collect and circulate marketing intelligence. The staff scans relevant publications, summarize important news and send news bulletins to marketing managers.
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Marketing Information System • A marketing information system (MIS) is
intended to bring together disparate items of data into a coherent body of information.
• A marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyse, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation and control.
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Marketing Information System
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Internal Reporting Systems
• All enterprises which have been in operation for any period of time have a wealth of information.
• The internal records that are of immediate value to marketing decisions are: orders received, stockholdings and sales invoices.
Product type, size and pack type by industry Product type, size and pack type by customer Average value and/or volume of sale by territory Average value and/or volume of sale by type of account Average value and/or volume of sale by industry Average value and/or volume of sale by sales person
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Marketing Models used in MIS
• Time series sales modelling techniques• Brand switching models• Linear programming• Elasticity models• Regression and correlation models• Analysis of Variance (ANOVA) models• Sensitivity analysis• Discounted cash flow
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Management Information System • A management information system (MIS) is a system
that provides information needed to manage organizations effectively.
• Management information systems involve three primary resources: technology, information, and people.
• The term "MIS" arose to describe information about sales, inventories et al that would help in managing the enterprise.
• Today, the term is used broadly and includes decision support systems, resource and people management applications, Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), project management and database retrieval applications.
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Marketing Research
• Often a firm needs specific information for solving a specific marketing problem.
• When a firm carries out proper marketing research before undertaking any marketing programme, its success rate increases and risk rate reduces.
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Toyota
The market research included:• Definition of the territory of a dealer• Timing and frequency of orders• Delivery and lead time for the arrival of
the vehicles
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Toyota
• Dealer margins and incentives offered by the manufacturer
• Extent of down payment by customers while ordering a car
• Advertising and sales promotions by dealers• Facilities sought by the manufacturer
from the dealer• Capital support by the manufacturer• Cash support for sales promotion• Assistance in training of personnel
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Toyota
• Number of service staff• Labour rates/salary structure• Space available for service work• Number of cars serviced per month
Toyota gained the knowledge that the dealer network is the key to success in a car venture in India.
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Marketing Research definedMarketing research is defined as the systematic gathering, recording and analyzing of data about problems related to the marketing of goods and services.
Marketing research reduces uncertainty in decision-making.
The information collected by conducting marketing research is used for problem solving and decision making in various areas of marketing.
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Marketing Research ApplicationsSubject Area of Application
Research on consumer
Consumer behaviour
Changes in consumer tastes
Consumer profile
Shifts in consumption patterns
Research on market/demand
Market sizeMarket potentialMarket growthMarket shareDemand measurement and sales forecastingSeasonal trends
Research on product/brand
Product design/features/qualityProduct usageBrand preferencePackagingService requirement
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Marketing Research ApplicationsSubject Area of Application
Research on competitionCompetitor’s products, prices, promotion, channels, et al
Research on distribution
Effectiveness of different marketing intermediariesWarehousing efficiencyDistribution cost analysis
Research on pricePricing patternPrice elasticity of demand
Research on advertising/promotion
Media researchEffectiveness of ad campaignsEffectiveness of sales promotions
Research on sales methods
Analysing selling problemsSales territories analysisMeasuring effectiveness of sales forceStudy of sales compensation
Marketing Researchcan help the marketing manager to:
• identify and define marketing problems and opportunities accurately
• understand markets and customers and offer reliable prediction about them
• develop marketing strategies and actions to provide a competitive edge and refine and evaluate them
• facilitate efficient usage of funds
• monitor marketing performance
• improve the understanding of marketing as a process
is important because
of
• rapidly changing marketing environment
• need for up-to-date information for strategically important areas
• importance of research as an integral part of better operation
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Marketing Research may not be necessary
Marketing research may not be necessary if:
• information is available• insufficient time• non-availability of resources• cost vs value of the research prohibitive• outcomes known
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The Marketing Research Process
Define the Problem, the decision alternatives andresearch objectives
Define the research problem• A research problem must be accurately
and precisely defined.• Nature of the problem determines the type
of study to be conducted. • Marketing problems may be difficulty-
related or opportunity-related. • Conduct situation analysis. It provides the
basic motivation and momentum for further research.
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Define the research problem
•What exactly does the firm want to know?•How to know that there is a problem?• In the initial stage, a problem may be recognized in
a very broad and general form only. • Both the researcher and the marketing manager
need to work together to formulate the problem into a precise and definite statement.
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Establish Research ObjectivesResearch objectives are related to and determined by the problem definition. In establishing research objectives, the researcher must answer the following questions:
•What specific information should the project provide? •If more than one type of information will be developed from the study, which is the most important? •What are the priorities? •When specifying research objectives, development of hypotheses might be very helpful.•When achieved, objectives provide the necessary information to solve the problem.
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90
The Marketing Research Process
Define the Problem, the decision alternatives andresearch objectives
Develop theresearch plan and collect theinformation
91
Develop the Research Plan
Development of a research plan involves making a
Research Design for carrying out the study. – There are a number of alternative research
designs. The choice will largely depend on the research purpose.
EXPLO RATO RYF ocu s G rou p ;O b serva tion ;
O th ers .
Q UALITATIVE RESEARCH
DESCRIPTIVES u rvey research
CAUSALL ab ora to ry E xp erim en t
F ie ld E xp erim en t
Q UANTITATIVE RESEARCH
M ARKET ING RESEARCH
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Qualitative Vs Quantitative Research
• Qualitative research involves collecting, analyzing and interpreting data by observing what people say or do.
• Quantitative research is the traditional mainstream of marketing research.
– It is also called “survey research.”
– Its purpose is very specific.
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Develop the Research Plan
ExploratoryResearch
DescriptiveResearch
CausalResearch
•Test hypotheses about cause- and-effect relationships.
•Test hypotheses about cause- and-effect relationships.
• Gathers preliminary information that will help define the problem
and suggest hypotheses.
• Gathers preliminary information that will help define the problem
and suggest hypotheses.
• Describes things such as consumers’ attitudes and demographics
or market potential for a product.
• Describes things such as consumers’ attitudes and demographics
or market potential for a product.
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Experimental ResearchExperimental Research
Develop the Research Plan
Observational ResearchObservational Research
Gathering data by observing people,actions and situations
(Exploratory)
Gathering data by observing people,actions and situations
(Exploratory)
Survey ResearchSurvey Research
Asking individuals aboutattitudes, preferences or
buying behaviors (Descriptive)
Asking individuals aboutattitudes, preferences or
buying behaviors (Descriptive)
Using groups of people to determine cause-and-effect
relationships(Causal)
Using groups of people to determine cause-and-effect
relationships(Causal)
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The Marketing Research Process
Define the Problem, the decision alternatives andresearch objectives
Develop theresearch plan and collect theinformation
Analysetheinformation and present the findings
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Collect the information
After defining the problem the researcher must determine what kind of information will best meet the research objectives. – Secondary
information– Primary
information
Marketing research information may be collected in many ways: – via mail, telephone,
fax, Internet, or personal interview.
– using consumer panels, consisting of individuals who have agreed to provide purchasing and media viewing behavior.
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Secondary Primary
Collect the information
Determine the specific information needed Determine the specific information needed
Information collected for the specific purpose at hand
Information collected for the specific purpose at hand
Both must be:RelevantAccurateCurrent
Impartial
Both must be:RelevantAccurateCurrent
Impartial
Information that has been previously collected
Information that has been previously collected
• Questionnaires are an inexpensive way to gather data.
• A questionnaire should be viewed as a multi-stage process beginning with definition of the aspects and ending with interpretation of the results.
• Every step needs to be designed carefully
because the final results are only as good as the weakest link in the questionnaire process.
Questionnaires
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• The Sample - Who are you going to ask? • The Method - How are you going to ask
them? • The Questions - What are you going to
ask them? • The Results - What will you do with the
information? • The Cost - How much do you want
to pay for the answer? • The Time - By when do you need
the Scale information?
Crucial Questions
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• Structured non-disguised questionnaire
• Structured disguised questionnaire
• Non-structured non-disguised questionnaire
• Non-structured disguised questionnaire
Types of Questionnaire
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The Marketing Research Process
Define the Problem, the decision alternatives andresearch objectives
Develop theresearch plan and collect theinformation
Analysetheinformation and present the findings
Make the decision
Analyse the information and present the findings • The researchers apply some advanced statistical
techniques and decision models, test different hypotheses and theories, apply sensitivity analysis to test assumptions.
• The major findings are presented to the management.
Make the decision• Depending on the confidence in the findings, the
management decides to use it, discard it or carry out more research.
Make the decision
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